SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
[ ]Preliminary Proxy Statement
[ ]Confidential, for use of the Commission only (as
permitted by Rule 14a-6(e)(2)).
[ X ]Definitive Proxy Statement
[ ]Definitive Additional Materials
[ ]Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
PROCYON CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:1 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1)Amount Previously Paid:
2)Form, Schedule or Registration Statement No.:
3)Filing Party:
4)Date Filed:
PROCYON CORPORATION
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held October 24, 2008
----------------
Notice is hereby given that the Annual Meeting of Shareholders of
Procyon Corporation, a Colorado corporation (the "Company"), will be held at the
offices of Procyon Corporation, 1300 S. Highland Ave, Clearwater, Florida 33756
on Friday, October 24, 2008, at 5:00 p.m. EST, or at any adjournment or
adjournments thereof, for the following purposes:
1. To elect eight directors to hold office for the term set forth in
the accompanying Proxy Statement and until their successors shall
have been duly elected and qualified;
2. To ratify the appointment of Ferlita, Walsh, & Gonzalez P.A. as
independent auditors for the 2009 fiscal year; and
3. To consider and transact such other business as may properly come
before the meeting or any adjournment thereof.
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING, although
only shareholders of record at the close of business on August 27, 2008, will be
entitled to notice of, and to vote at, the meeting or any adjournment thereof.
The transfer books of the Company will not be closed.
By Order of the Board of Directors,
/s/ Regina W. Anderson
-----------------------------------
Regina W. Anderson
Chief Executive Officer
Clearwater, Florida
September 29, 2008
IMPORTANT
PLEASE MARK, DATE, SIGN, NOTE ANY CHANGE OF ADDRESS AND RETURN THE ENCLOSED
PROXY CARD IMMEDIATELY IN THE ENCLOSED, SELF-ADDRESSED ENVELOPE. NO POSTAGE IS
NECESSARY IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE MEETING, WE WILL BE
GLAD TO RETURN YOUR PROXY SO THAT YOU MAY VOTE IN PERSON.
PROCYON CORPORATION
1300 S. HIGHLAND AVENUE
CLEARWATER, FLORIDA 33756
(727) 447-2998
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held October 24, 2008
General
The enclosed proxy is solicited by the Board of Directors of Procyon
Corporation (hereinafter referred to as the "Company") for use at the Annual
Meeting of Shareholders to be held at the Procyon Corporation, 1300 S. Highland
Ave., Clearwater, Florida at 5:00 p.m., Eastern Time, on Friday, October 24,
2008, for the purposes set forth in the foregoing Notice of Annual Meeting of
Shareholders. This Proxy Statement and the form of proxy will be mailed to
shareholders on or about September 29, 2008. A shareholder giving a proxy has
the power to revoke it at any time prior to its exercise by notifying the
Secretary of the Company. Unless the proxy is revoked, or unless it is received
in such form as to render it invalid, the shares represented by it will be voted
in accordance with the instructions contained therein.
The record date with respect to this solicitation is August 27, 2008.
All holders of record of Common Stock and Preferred Stock of the Company as of
the close of business on that date are entitled to vote at the meeting. As of
August 27, 2008, the Company had a total of 8,254,488 voting shares consisting
of 8,055,388 of Common shares, and 199,100 shares of Preferred Stock. Each
Common and Preferred share is entitled to one vote. A majority of the votes
entitled to be cast constitutes a quorum. If a quorum exists, action on any
matter other than the election of directors will be approved if the votes cast
in person or by proxy at the meeting favoring the action exceed the votes cast
opposing the action. In the election of directors, that number of candidates
equaling the number of directors to be elected having the highest number of
votes cast in favor of their election will be elected. Abstentions and broker
non-votes are not counted in the calculation of the vote. The Company's officers
and directors and director nominees, who are expected to vote for the directors
nominated by the Board of Directors and to vote in accordance with the
recommendations of the Board of Directors, own a majority of the Company's
outstanding shares. A shareholder may revoke a proxy at any time prior to its
being voted. If a proxy is properly signed and is not revoked by the
shareholder, the shares it represents will be voted at the meeting in accordance
with the instructions of the shareholder. If the proxy is signed and returned
without specifying choices, the shares will be voted in accordance with the
recommendations of the Board of Directors. The cost of this solicitation will be
borne by the Company. Employees and directors of the Company may solicit proxies
but will not receive any additional compensation for such solicitation. Proxies
may be solicited personally or by mail, facsimile or telephone.
As a matter of policy, the Company holds proxies, ballots and voting
tabulations that identify individual shareholders confidential. Such documents
are available for examination only by the inspectors of election, none of which
is an employee of the Company, and certain employees associated with tabulation
of the vote. The identity of the vote of any shareholder is not disclosed except
as may be necessary to meet legal requirements.
I. ELECTION OF DIRECTORS
The eight nominees for election as directors are currently members of
the Board of Directors. The Board of Directors knows of no reason why any
nominee would be unable to serve as a director. If any nominee should for any
reason become unable to serve, the shares represented by all valid proxies will
be voted for the election of such other person as the Board of Directors may
designate or the Board of Directors may reduce the number of directors to
eliminate the vacancy. If the nominees for director are re-elected, the Board
will continue to be composed of a majority of independent directors.
The following material contains information concerning the nominees,
including their recent employment, positions with the Company, other
directorships and age as of the date of this Proxy Statement.
Capacities in Director
NAME Age Which Served Since
- ---- --- ------------ -----
Regina W. Anderson 61 Chief Executive Officer and 2005
Chairman of the Board
Chester L. Wallack 67 Director 1995
Fred W. Suggs, Jr. 62 Director 1995
Alan B. Crane 58 Director 1995
Jeffery S. Slowgrove 51 Director 1999
James B. Anderson 38 Director 2006
Justice W. Anderson 31 Director 2006
Michael T. Foley 70 Director 2006
Regina Anderson. Ms. Anderson has served as Chairman of the Board of
Directors since September 2005, and as our Chief Executive Officer since
November 2005. Ms Anderson has 27 years experience in the medical field and 21
years of management experience. Ms. Anderson worked at HealthSouth
Rehabilitation Hospital for ten years as Outpatient Director, in charge of the
main outpatient center plus four satellite offices. As Outpatient Director, she
was responsible for budgets involving over thirty thousand outpatient visits per
year; marketing of multiple outpatient specialty programs; and staffing with
thirty employees reporting directly to her. Prior to her work at HealthSouth,
she worked as the lead clinician at Clearwater Rehabilitation Center. Regina was
Vice-President of Operations at Stuffit Direct Marketing Company from 1980
through 1989. She was in charge of franchise sales and training; coupon
processing/production as well as coordination among thirteen franchise offices.
Regina was co-owner and President of Foxy's T-Shirt Shops and Le Shirt Company
from 1978-1980. Foxy's had five locations. She worked as a Speech Language
Pathologist with Morton Plant Hospital from 1970 through 1976. Regina received
her Masters Degree from Kansas State University in 1970.
Chester L. Wallack. Mr. Wallack has served as a director since 1995.
Mr. Wallack is also a member of the Compensation Committee. He has served as
Chief Executive Officer of Felton West, Inc., a real estate development and
construction company in Dover, Delaware, since 1990. Mr. Wallack is a retired
United States Air Force officer having served as a pilot and in various
management capacities. He graduated from the University of Kansas with a B.S.
degree in Industrial Management and from Southern Illinois University with an
M.B.A. degree in Finance.
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Fred W. Suggs, Jr. Mr Suggs has served on our Board of Directors since
1995. He is also a member of the Compensation Committee and the Ethics
Committee. He has been a practicing attorney since 1975. He is a partner in the
Greenville, South Carolina office of Ogletree, Deakins, Nash, Smoak & Stewart,
specializing in labor and employment law. He has been certified as a specialist
in labor and unemployment law by the South Carolina Supreme Court and is a
frequent lecturer on labor and employment law issues. Mr. Suggs graduated from
Kansas State University with a B.S. degree and he received his J.D. degree from
the University of Alabama.
Alan B. Crane. Mr. Crane has served on our board since 1995 and is also
a member of the Ethics Committee. He is a partner in Crane Farms, a farming
partnership in Larned, Kansas. In 1994, Mr. Crane was appointed by the governor
of Kansas to the Kansas Water Authority to oversee project expenditures. He
received a B.S. degree from Kansas State University.
Jeffery Slowgrove. Mr. Slowgrove has served as a director since 1999.
Since 1998, Mr. Slowgrove has been the President of JSS Management Consulting,
Inc., a consulting firm in Palm Harbor, Florida, providing funding for start up
organizations and advice on the business and management issues facing companies
during early rapid growth and expansion phases. He co-founded IMR Global Corp.
in 1988 and has served as a director since its inception. From 1988 to 1998, he
also served as Treasurer of IMR Global Corp., which is a public company
providing applications software-outsourcing solutions for the information
technology departments of large businesses. He received a B.B.A. from the
University of Michigan.
James B. Anderson. Mr. Anderson has served as our Chief Financial
Officer since June 2005 and as a director since December 2006. In addition, from
September 22, 2005, until that position was filled by Regina Anderson on
November 1,2005, Mr. Anderson served as Interim Chief Executive Officer. On June
28, 2005, Mr. Anderson was appointed to serve as the President of Sirius Medical
Supply, Inc. Since 1993, Mr. Anderson has been involved with Amerx Health Care
Corporation as its Chief Information Officer. In 1996, Mr. Anderson became
involved with Procyon Corporation after its merger and has since performed the
duties of Vice President of Operations. Prior to Mr. Anderson's work with the
Company, he was involved with importing and exporting to Russia and Direct Mail
Marketing. He received a B.S. from the University of South Florida. Mr. Anderson
is the son of John C. Anderson, our late President, Chief Executive Officer and
Chairman of the Board, the son of Regina Anderson, the Company's Chairman of the
Board and Chief Executive Officer, and the brother of Justice W. Anderson, a
director and our Vice President of Sales & Marketing and the President of Amerx
Health Care Corporation. Mr. Anderson is the son-in-law of our deceased former
director, Richard T. Thompson.
Justice W. Anderson. Mr. Anderson has served as a director since
December 2006. Since June 28, 2005, Mr. Anderson has served as our Vice
President of Sales and Marketing and the President of Amerx Health Care
Corporation. Since January of 2001, Mr. Anderson has been Vice President of
Sales for Amerx Health Care Corp. He also serves on the board of the American
Academy of Podiatric Practice Management. From August 2000 to January 2001, he
served as Senior Sales Representative, and as a sales representative from May
2000 to August 2000. He received a B.A. degree from the University of Florida.
Mr. Anderson is the son of John C. Anderson, our late President, Chief Executive
Officer and Chairman of the Board, the son of Regina Anderson, the Company's
Chairman of the Board and Chief Executive Officer and the brother of James B.
Anderson, a director and our Chief Financial Officer and the President of Sirius
Medical Supply, Inc.
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Michael T. Foley. Mr. Foley has been a director since 2006 and is a
member of the Audit Committee, the Compensation Committee and the Ethics
Committee. He is currently a Vice President and Director of Suwannee Lumber
Company, manufacturers of various lumber grades, garden mulch and potting soil.
From 1997 to 2003, Mr. Foley served as President and CEO of Gypsum Products,
Inc. of Largo, FL. From 1972 to 1996 Mr. Foley served in various capacities at
Florida Forest Products, Inc. including President, Chairman and CEO. Prior to
his association with these building material suppliers, Mr. Foley worked for
International Paper in pulp and newsprint sales. Michael received his Bachelor
of Business Administration degree from the University of Notre Dame in 1960 and
subsequently served on that university's National Alumni Board. He obtained his
MBA from the University of Florida in 1965. Mr. Foley has been a member of the
Pinellas County Committee of 100 and was appointed by Governor Lawton Chiles to
the State of Florida Community Health Purchasing Alliance (CHPA) Board. Mr.
Foley is also a retired Captain in the U.S. Naval Reserve.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding beneficial
ownership of Common Stock as of August 27, 2008 by (i) each person known by the
Company to own beneficially more than 5% of the outstanding Common Stock, (ii)
each director or director nominee, and (iii) all executive officers and
directors as a group. Each person has sole voting and sole investment or
dispositive power with respect to the shares shown except as noted. As to the
Company's preferred stock, as of August 27, 2008, no officer or director of the
company owned any preferred shares. In addition, no individual shareholder
beneficially owned more than 5% of the Company's preferred shares.
Common Shareholdings on
August 27, 2008
---------------------------
Number of Percent of
Name and Address(5) Shares Class
- ------------------- ------ -----
Regina W. Anderson 72,500 *
Chester L. Wallack (l) 120,000(3) 1.45
Fred W. Suggs (l) 160,000(3) 1.93
Alan B. Crane 80,000(3) *
Jeffery S. Slowgrove 606,200(4) 7.50
James B. Anderson 111,000(7) 1.34
Justice W. Anderson(6) 3,483,500(3) 42.12
Michael T. Foley (1)(2) 140,000(8) 1.7
All directors and officers and
director nominees as a group (eight persons) 4,838,200 59.00
RMS Limited Partnership, 50 W. Liberty St, 1,600,000 19.90
Suite 700, Reno, NV 89501
* Less than 1%
(1) Member of the Compensation Committee
(2) Member of the Audit Committee.
(3) Includes 60,000 shares subject to currently exercisable options or options
which will become exercisable within 60 days.
(4) Includes 10,000 shares of subject to currently exercisable options or
options which will become exercisable within 60 days.
(5) Except as noted above, the address for all persons listed is 1300 S.
Highland Ave, Clearwater, Florida 33756
(6) Mr. Anderson beneficially owns 3,350,000 shares of common stock and 60,000
currently exercisable options to purchase shares of common stock as Trustee
of the John C. Anderson Trust in accordance with Mr. Anderson's will. He
also owns of record 73,000 shares of common stock.
-4-
(7) Includes 30,000 shares subject to currently exercisable options and 10,000
shares in joint name with his wife.
(8) Includes 5,000 shares in joint name with his wife.
Compensation of Directors and Executive Officers.
Processes and Procedures for the Consideration and Determination of
Executive and Director Compensation.
Compensation programs for our executive officers are reviewed and
recommended by our Compensation Committee and are approved by the Board of
Directors. None of the executive officers are members of the Compensation
Committee or otherwise had any role in determining the compensation for
themselves or other executives, although the Compensation Committee does receive
input from the executive officers when considering adjustments to base salary
and other compensation components and the Chief Executive Officer's
recommendations with respect to compensation of the other executives. The
Compensation Committee conducts an annual review of our executive compensation
programs to ensure that they meet the Company's objectives. The Compensation
Committee does not delegate its authority to evaluate and make recommendations
to the Board concerning executive compensation to any persons. Further, the
Compensation Committee has not relied in the past on any consultants in the
performance of its duties. The Compensation Committee is also responsible for
making recommendations concerning director compensation. Currently, the
directors do not receive any compensation.
Summary Compensation Table. The following table sets forth compensation
information for the two fiscal years ended June 30, 2008 and 2007 of the
Company's Chief Executive Officer and the President of our subsidiary, Amerx
Health Care Corp. (the "Named Executive Officers"). Elements of compensation for
our Named Executive Officers include salary, discretionary cash bonuses and
other perquisites and benefits. We do not have a pension plan, do not pay
non-equity incentive plan based compensation and do not offer nonqualified
deferred compensation arrangements. We also did not grant stock awards in fiscal
year 2008. As a result, columns related to these items have been omitted from
the table below.
All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($) Total($)
- --------------------------- ---- --------- -------- --------------- --------
Regina W. Anderson, 2008 $152,165 $ 2,000 $ -0- $154,165
President, Chief Executive 2007 $156,317 $ 500 -0- $156,817
Officer
Justice W. Anderson, 2008 $ 38,717 $ 2,000 $105,072 (1) $145,789
President (Amerx Health 2007 $ 36,200 $ 2,500 $112,437 (1) $151,137
Care Corp.)
(1) Consists solely of commissions on sales from Amerx Health Care Corp.
Outstanding Equity Awards at 2008 Fiscal Year End
The following table sets forth information regarding the outstanding
equity awards to our Named Executive Officers at June 30, 2008. We have not
granted any stock awards to our Named Executive Officers and, accordingly, we
had no outstanding stock awards during 2008. Thus, the columns related to stock
awards have been omitted from the following table.
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Option Awards
Number of Number of
Securities Securities
Underlying Underlying
Unexercised Unexercised Option
Options Options Exercise Option
(#) (#) Price Expiration
Name Exercisable Unexercisable ($) Date
- ------------------------------------------------------------------------------------------------------------
Regina W. Anderson, - - - -
Chief Executive
Officer and
Chairman of the
Board of Directors
Justice W. Anderson, 50,000 (1) - $ .2125 12/2009
President, Amerx 10,000 (1) - $ .1594 11/2010
Health Care Corp.
(1) As trustee of the John C. Anderson Trust in accordance with Mr. Anderson's
will.
Stock Option Plan
The Company's 1998 Omnibus Stock Option Plan, as amended on December
31, 2007 (the "1998 Plan"), which expires by its terms on December 5, 2008, is
designed as a comprehensive benefit plan that gives the Company the ability to
offer a variety of equity based incentives and awards to persons who are key to
the Company's growth, development and financial success. The 1998 Plan permits
the grant of awards to directors, employees and consultants of the Company and
its subsidiaries. The 1998 Plan provides for the grant of incentive stock
options ("Incentive Stock Options") within the meaning of the Code,
non-qualified stock options, restricted shares, performance units, performance
shares, dividend equivalent, share appreciation rights ("SARs") and other forms
of awards, including deferrals of earned awards, (collectively, the "Awards").
Employees and non-employees to whom an offer of employment has been extended,
directors and consultants of the Company are all eligible participants for all
Awards, except that Incentive Stock Options may be granted only to employees.
The 1998 Plan is administered by the Compensation Committee of the
Board of Directors, which construes and interprets the 1998 Plan, determines the
terms and conditions of the Awards granted under the 1998 Plan, including the
individuals who are to granted Awards, the exercise price, if any, the number of
shares subject to an Award and the vesting and duration of Awards, subject to
any restrictions contained in the 1998 Plan.
The maximum number of shares of Common Stock reserved and available for
Awards under the 1998 Plan is 1,000,000 and the Compensation Committee may limit
the number of shares that may be awarded in the form of restricted stock Awards.
The exercise price of Incentive Stock Options granted under the 1998
Plan must be at least equal to the fair market value of the Common Stock of the
Company on the date of grant, and must be 110% of fair market value when granted
to an employee who owns shares representing more than 10% of the voting power of
all classes of stock of the Company. The exercise price of non-qualified stock
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options granted under the 1998 Plan can not be less than 85% (100% as amended,
effective for options granted on or after December 31, 2007) of the fair market
value of the Common Stock on the date of grant. The term of all options granted
under the 1998 Plan may not exceed ten years, except the term of Incentive Stock
Options granted to a 10% or more stockholder, may not exceed five years. The
1998 Plan may be amended or terminated by the Board of Directors, but no such
action may impair the rights of a participant under a previously granted option.
The 1998 Plan provides for the award of SARs and Performance Units and
Performance Shares. A SAR is an incentive Award that permits the holder to
receive (per share covered thereby) the amount by which the fair market value of
a share of Common Stock on the date of exercise exceeds the fair market value of
such share on the date the SAR was granted or at such date as the Compensation
Committee designates. The Compensation Committee may grant SARs independently,
in addition to, or in tandem (such that the exercise of the SAR or related stock
option will result in forfeiture of the right to exercise the related stock
option or SAR for an equivalent number of shares) with a stock option Award. A
Performance Unit or Performance Share is an incentive Award whereby the Company
commits to make a distribution depending on the attainment of a performance
objective and condition established by the Committee and the base value of the
Performance Unit or Performance Share.
Upon termination of services of a non-employee director or consultant,
all options issuable, but not yet granted, to such persons for services rendered
shall be granted and all options shall remain exercisable for the original
option term. Options granted to an employee are exercisable for specified
periods of time ranging from one month to one year following an employee's
termination depending on the circumstances of the termination, except that
options granted to an employee terminated for cause shall not be exercisable to
any extent after termination. An unexercised option is exercisable only to the
extent that it was exercisable on the date of termination.
The 1998 Plan provides that, in the event the Company enters into an
agreement providing for the merger of the Company into another corporation, an
exchange of shares with another corporation, the reorganization of the Company
or the sale of substantially all of the Company's assets, unvested stock options
become immediately vested and exercisable. Upon the consummation of the merger,
exchange, reorganization or sale of assets, the successor corporation must
assume all Awards or substitute another Award on substantially identical terms
to the outstanding Award. Effective December 31, 2007, the Company enacted
certain amendments to the plan to make it compliant with the recent regulations
that were issued concerning deferred compensation in Section 409A, IRC. These
amendments did not have any material effect on the financial reporting of the
Company.
Compensation of Directors
No employee of the Company receives any additional compensation for his
services as a director. No non-employee director receives any compensation for
his service; however, the Board of Directors has authorized payment of
reasonable travel or other out-of-pocket expenses incurred by non-management
directors in attending meetings of the Board of Directors. The Board of
Directors may consider alternative director compensation arrangements from time
to time.
Committees of the Board
The Board of Directors has delegated certain of its authority to a
Compensation Committee, an Audit Committee and an Ethics Committee.
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The Compensation Committee is composed of Messrs. Wallack, Suggs and
Foley. The Compensation Committee adopted a Charter on December 8, 2007, a copy
of which is attached to this proxy statement as Appendix B. Each member of the
Compensation Committee is not a former or current officer or employee of the
Company and is otherwise independent within the meaning of the applicable rules
of The Nasdaq Stock Market, Inc. ("Nasdaq"). The primary function of the
Compensation Committee is to review and make recommendations to the Board with
respect to compensation matters, including bonuses for employees, and to
administer the Company's Option Plan. Historically, review and adjustment of
compensation of our executive officers has primarily been determined by our
Chief Executive Officer.
The Company formed an Audit Committee in July 2004, composed solely of
Mr. Slowgrove. In October 2006, the entire board of directors voted to act as
the Company's Audit Committee on an interim basis. In December 2006, the Board
nominated Michael T. Foley as Audit Committee member and Chair. The Board
believes that Mr. Foley is independent pursuant to Nasdaq rules and also meets
the requirements of an "audit committee financial expert" under applicable SEC
Rules. In addition, we have determined that Mr. Foley is also independent within
the meaning of SEC Rule 10A-3(b)(1).
The Audit Committee adopted a Charter, effective October 27, 2006. A
copy of the Audit Committee Charter was attached as an Appendix to our Proxy
Statement for fiscal 2007, filed with the Securities and Exchange Commission on
November 13, 2006. Pursuant to its Charter, the primary function of the Audit
Committee is to review and approve the scope of audit procedures employed and to
review and approve the audit reports rendered by the Company's independent
auditors and to approve the audit fees charged by the independent auditors. In
addition, pursuant to the Sarbanes-Oxley Act of 2002 and rules promulgated
thereunder, the Audit Committee is responsible for, among other things,
pre-approving all audit and non-audit services performed by the independent
auditors, approving the engagement of the auditors and receiving certain reports
from the independent auditors prior to the filing of the audit report. The Audit
Committee reports to the Board of Directors with respect to such matters and
recommends the selection of independent auditors.
The Company does not have a Nominating Committee. However, the entire
board of directors, which is comprised of a majority of independent directors
pursuant to applicable Nasdaq rules, performs the function of a nominating
committee. The Company believes that a separate committee is not necessary for a
company of its size. For purposes of the Audit Committee and the foregoing
statement, the Company has used the definition of "independent director" as
contained in the corporate governance rules of Nasdaq. With respect to the Audit
Committee, the Company also follows the audit committee independence
requirements pursuant to Rule 10A-3(b) promulgated under the Exchange Act.
The Company's Ethics Committee is composed of Messrs. Suggs, Crane and
Foley. The purpose of the Ethics Committee is to oversee and institute policies
for corporate governance and ethical business standards. The Company has adopted
a Code of Ethics for Senior Financial Officers.
Director Independence
We believe that Messrs. Wallack, Suggs, Crane, Slowgrove and Foley are
independent directors as defined under applicable Nasdaq rules. Regina W.
Anderson, James B. Anderson and Justice W. Anderson are not deemed to be
independent directors as each is an executive officer or the Company and/or its
subsidiaries. We believe Mr. Foley meets the audit committee independence
requirements of Rule 10A-3(b).
-8-
Nomination Procedures
Shareholders may recommend director candidates for inclusion by the
board of directors in the slate of nominees which the board recommends to
shareholders for election. The qualifications of recommended candidates will be
reviewed by the board. If the board determines to nominate a
stockholder-recommended candidate and recommends his or her election as a
director by the shareholders, his or her name will be included in the Company's
proxy card for the stockholder meeting at which his or her election is
recommended.
Shareholders may recommend individuals to the board for consideration
as potential director candidates by submitting their names and background to the
Company's Corporate Secretary, at the Company's address set forth above. Such
recommendations will be forwarded to the board. The board will consider a
recommendation only if appropriate biographical information and background
material is provided on a timely basis.
In order to be considered timely, shareholder nominations for our next
annual meeting for fiscal 2010, along with all required information, must be
received by the Company no later than July 11, 2009.
The process followed or expected to be followed by the board to
identify and evaluate candidates includes requests to board members and others
for recommendations, meetings from time to time to evaluate biographical
information and background material relating to potential candidates and
interviews of selected candidates by members of the board.
Assuming that appropriate biographical and background material is
provided for candidates recommended by shareholders, the board will evaluate
those candidates by following substantially the same process, and applying
substantially the same criteria, as for candidates submitted by board members or
by other persons. In considering whether to recommend any candidate for
inclusion in the board's slate of recommended director nominees, including
candidates recommended by shareholders, the board will consider, among other
things, the candidate's:
o integrity and honesty,
o ability to exercise sound, mature and independent business
judgment in the best interests of the shareholders as a whole,
o background and experience with manufacturing, retailing,
operations, finance, marketing or other fields which will
complement the talents of the other board members,
o willingness and capability to take the time to actively
participate in board and Committee meetings and related
activities,
o ability to work professionally and effectively with other board
members and Company management,
o availability to remain on the board long enough to make an
effective contribution, and
o absence of material relationships with competitors or other third
parties that could present realistic possibilities of conflict of
interest or legal issues; and
o experience with accounting rules and practices.
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The board does not assign specific weights to particular criteria and
no particular criterion is necessarily applicable to all prospective nominees.
The board believes that the backgrounds and qualifications of the directors,
considered as a group, should provide a significant composite mix of experience,
knowledge and abilities that will allow the board to fulfill its
responsibilities.
Audit Committee Report
In September, 2008, the Audit Committee, submitted the following
report:
I have reviewed and discussed with management the Company's audited
financial statements for the year ended June 30, 2008 (the "Fiscal Year 2008
Financial Statements").
I have discussed with the independent auditors the matters required to
be discussed by Statement on Auditing Standards No. 61, as amended (AICPA,
Professional Standards, Vol. 1. AU section 380), as adopted by the Public
Company Accounting Oversight Board in Rule 3200T.
I have received and reviewed the written disclosures and the letter
from the independent auditors required by Independence Standard No. 1
(Independence Standards Board Standard No. 1, Independence Discussions with
Audit Committees), as adopted by the Public Company Accounting Oversight Board
in Rule 3200T, and have discussed with the auditors the auditors' independence.
Based upon the reviews and discussions referred to above, I recommended
to the Board of Directors that the Fiscal Year 2008 Financial Statements be
included in the Company's Form 10-K for the year ended June 30, 2008.
This Audit Committee Report shall not be deemed incorporated by
reference in any document previously or subsequently filed with the Securities
and Exchange Commission that incorporates by reference all or any portion of the
proxy statement, in connection with the annual meeting, except to the extent
that the Company specifically requests that this Report be specifically
incorporated by reference.
Date: September 18, 2008 Michael T. Foley,
Audit Committee member and Chairman
Board and Committee Attendance
In fiscal 2008, the Board of Directors held five formal meetings. A
majority of directors attended each meeting in person or by telephone. The
Compensation Committee held one meeting during fiscal 2008. The Audit Committee
held two meetings during fiscal 2008.
The Company encourages, but does not require, Board members to attend
the annual meeting of shareholders. All of the directors attended last year's
annual meeting.
Code of Ethics for Senior Financial Officers
The Company has adopted a Code of Ethics for Senior Financial Officers.
The Code of Ethics applies to all senior financial officers of the Company,
including the Chief Executive Officer, the Chief Financial Officer, the
Treasurer and any other person performing similar functions.
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The Board of Directors has unanimously approved and recommends that
shareholders vote FOR the director nominees identified above.
II. SELECTION OF AUDITORS
Our Audit Committee has approved the engagement of Ferlita, Walsh &
Gonzalez, P.A. of Tampa, Florida, to act as our independent registered public
accountants for fiscal 2009, subject to approval of our shareholders in this
proposal for the annual meeting. Ferlita, Walsh & Gonzalez, P.A. has examined
the financial statements of the Company beginning with the fiscal year ended
June 30, 1999. No members of Ferlita, Walsh & Gonzales, P.A. are expected to be
in attendance at the annual meeting.
Audit Fees. In fiscal 2008, the Company paid to its independent
accountants $32,629 in fees related directly to the audit and review of the
Company's financial statements. In fiscal 2007, the Company paid to its
independent accountants $34,749 in fees related directly to the audit and review
of the Company's financial statements.
Audit-Related Fees. The Company's independent accountants performed no
other audit-related services for the Company during fiscal 2007 and 2008 other
than the audit services described above.
Tax Fees: In fiscal 2008, the Company paid to its independent
accountants $2,490 in fees related directly to tax preparations. In fiscal 2007,
the Company paid to its independent accountants $1,350 in fees related directly
to tax preparations.
All Other Fees: The Company's independent accountants performed no
other services for the Company during fiscal 2006 and 2007 other than the audit
and tax services described above.
The board of directors of the Company considers the services provided
by Ferlita, Walsh, & Gonzalez, P.A. to be compatible with maintaining Ferlita,
Walsh & Gonzalez, P.A.'s independence.
Audit Committee Pre-Approval Procedures. Procyon's independent auditor
reports to, and is engaged at the direction of, the Audit Committee, with annual
approval by the shareholders. Effective May 2003, the board implemented, and
after the formation of the Audit Committee in July 15, 2004, the Audit Committee
ratified, new procedures for the pre-approval of audit and non-audit services
performed by the Company's independent auditors. The Audit Committee has the
sole authority to pre-approve all audit and non-audit services provided by the
independent auditors to the Company and acts to assure that the independent
auditors are not engaged to perform specific non-audit services proscribed by
law or regulation.
The Board of Directors recommends a vote FOR ratification of Ferlita, Walsh &
Gonzalez P.A. as independent auditors for the Company for the 2009 fiscal year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's
directors, its executive officers, and any persons holding more than ten percent
of the Company's Common Stock are required to report their initial ownership of
the Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission and the Company. Specific due dates for these
reports have been established and the Company is required to disclose any
failure to file, or late filing, of such reports. Based solely on the Company's
review of the reports and amendments thereto furnished to the Company and
written representations that no other reports were required to be filed in
fiscal 2008, the Company's officers, directors and beneficial owners of more
than ten percent of its Common Stock complied with all Section 16(a) filing
requirements.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than transactions described below, since July 1, 2007, there has
not been, nor is there currently proposed, any transaction or series of similar
transactions to which we were or will be a party:
o in which the amount involved exceeds $120,000; and,
o in which any director, nominee for director, executive officer,
shareholder which beneficially owns five percent or more of our
common stock or any member of their immediate family members, had
or will have a direct or indirect material interest.
Messrs. Wallack, Suggs, Crane and Thompson, have purchased a total of
261,000 shares of Preferred Stock at a price of $1 per share. Such purchases
were made on terms and conditions, which were identical to the purchases made by
all other private investors who purchased Preferred Stock. Regina W. Anderson,
our Chairman and Chief Executive Officer, personally guaranteed the loan we
secured from Bank of America, N.A., in the amount of $508,000, to purchase our
office building in July 2006 and guaranteed a line of credit secured by the
Company in the amount of $250,000. Mr. Slowgrove, a director, acted as a
consultant to the Company for portions of fiscal 2008, at a total compensation
to him of approximately $6,250.
ANNUAL REPORT
The Annual Report to Shareholders for fiscal 2008 is being sent to all
shareholders with this Proxy Statement. The Annual Report to Shareholders does
not form any part of the material for the solicitation of any Proxy. The Annual
Report to Shareholders contains the Company's Annual Report on Form 10-K for
fiscal 2008, as filed with the Securities and Exchange Commission on September
5, 2008. An additional copy, without exhibits, is available without charge to
any shareholder of the Company upon written request to James B. Anderson,
Procyon Corporation, 1300 S. Highland Ave., Clearwater, Florida 33756.
SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 (the
"Exchange Act"), some stockholder proposals may be eligible for inclusion in the
Company's Proxy Statement for the Company's 2010 Annual Meeting. Shareholders
who intend to submit proposals for inclusion in the Proxy Statement relating to
the year ending June 30, 2009 must do so by sending the proposal and supporting
statements, if any, to the Company no later than July 11, 2009, and must meet
the requirements of Rule 14a-8 under the Exchange Act. Such proposals should be
sent to the attention of the Corporate Secretary, Procyon Corporation, 1300 S.
Highland Ave, Clearwater, Florida 33756. The submission of a stockholder
proposal does not guarantee that it will be included in the Company's Proxy
Statement. If a shareholder intends to present a proposal for consideration at
the fiscal 2010 annual meeting outside of the processes of Rule 14a-8 under the
Exchange Act, the SEC rules permit management to vote proxies in its discretion
if we receive notice of the proposal before the close of business on September
24, 2009 and advise shareholders in our proxy statement for next year's annual
meeting about the nature of the matter and how our management intends to vote on
such matter.
SHAREHOLDER COMMUNICATIONS WITH THE BOARD
The Board of Directors of the Company has implemented a process whereby
shareholders may send communications to the Board's attention. Any shareholder
desiring to communicate with the Board, or one or more specific members thereof,
should communicate in a writing addressed to Procyon Corporation, 1300 S.
Highland Ave., Clearwater, Florida 33756. The Corporate Secretary of the Company
has been instructed by the Board to promptly forward all such communications to
the specified addressees thereof.
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OTHER MATTERS
Except for the matters described herein, management does not intend to
present any matter for action at the Annual Meeting and knows of no matter to be
presented at such meeting that is a proper subject for action by the
shareholders. However, if any other matters should properly come before the
Annual Meeting, it is intended that votes will be cast pursuant to the authority
granted by the enclosed Proxy in accordance with the best judgment of the person
or person acting under the Proxy.
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Appendix A
PROCYON CORPORATION
Annual Meeting of Shareholders to be held on October 24, 2008
KNOW ALL MEN BY THESE PRESENTS: that the undersigned shareholder of Procyon
Corporation (the "Company") hereby constitutes and appoints Regina W. Anderson
and Chester L. Wallack, or either of them, as attorneys and proxies, each with
the power to appoint his substitute, and hereby authorizes them to represent and
vote, as designated below, all of the shares of Common Stock or Preferred Stock
of the Company which the undersigned is entitled to vote at the Annual Meeting
of Shareholders of the Company to be held October 24, 2008, and at any and all
adjournments thereof with respect to the matters set forth below and described
in the Notice of Annual Meeting of Shareholders and Proxy Statement dated
September 29, 2008, receipt of which is acknowledged.
1. To consider and act upon a proposal to elect Regina W. Anderson, and
Messrs. Chester L. Wallack, Fred W. Suggs, Jr., Alan B. Crane, Jeffery S.
Slowgrove, James B. Anderson, Justice W. Anderson and Michael T. Foley as
directors to hold office for one-year terms or until their successors are
elected and qualified.
o FOR ELECTION OF ALL NOMINEES (except as shown below)
o WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES
Instruction: To withhold authority to vote for any individual nominee,
strike through the nominee's name below.
Regina W. Anderson Chester L. Wallack
Fred W. Suggs, Jr. Alan B. Crane
Jeffery S. Slowgrove Michael T. Foley
James B. Anderson Justice W. Anderson
2. To ratify the appointment of Ferlita, Walsh, & Gonzalez, P.A. as
independent auditors of the Company for the 2009 fiscal year.
o FOR RATIFICATION
o AGAINST RATIFICATION
o ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any and all
adjournments thereof.
o AUTHORIZED TO VOTE
o ABSTAIN
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder(s). IF NO INDICATION IS MADE, THIS PROXY WILL BE
VOTED FOR THE NOMINEES LISTED AND FOR PROPOSAL 1 AND THE PROXY HOLDERS WILL VOTE
ON ANY PROPOSAL UNDER 3 IN THEIR DISCRETION AND IN THEIR BEST JUDGMENT.
Please mark, date, and sign exactly as your name appears on your stock
certificate. When shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership name by authorized person.
Dated:
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Signature
[Mailing Label] Dated:
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Signature if held jointly
Appendix B
PROCYON CORPORATION COMPENSATION COMMITTEE CHARTER
Purpose
The Compensation Committee of Procyon Corporation (the "Company) is
charged with the following responsibilities:
o reviewing and recommending to the Board of Directors the annual
base salary, bonus and other benefits for the senior executive
officers of the Company;
o reviewing and commenting on new executive compensation programs
that the Company proposes to adopt;
o overseeing, administering and approving matters related to the
Company's stock option plan;
o periodically reviewing the results of the Company's executive
compensation and perquisite programs to ensure that such
compensation is properly coordinated to yield payments and
benefits that are reasonably related to executive performance;
o ensuring that a significant portion of executive compensation is
reasonably related to the long-term interests of the
stockholders;
o participating in the preparation of certain portions of the
Company's annual proxy statement and other SEC filings related to
compensation matters;
o if necessary, hiring a compensation expert to provide independent
advice on compensation levels;
o ensuring that the Company undertakes appropriate planning for
management succession and advancement;
o providing reports to the Board from time to time regarding the
matters reviewed or approved by the Compensation Committee;
o reviewing and evaluating its own performance on an annual basis
and providing a report of such review to the Board; the
performance of the Compensation Committee shall be reviewed and
evaluated on an annual basis by the Board;
o otherwise discharging the Board's responsibilities relating to
compensation of the Company's officers and directors; and-
o reviewing and reassessing this Charter at least annually and
submitting any recommended changes to the Board for its
consideration.
Compensation Philosophy
The primary objective of the Company's executive compensation program
is to help the Company to achieve its strategic business objectives and to
create value for the Company's stockholders by attracting, motivating and
retaining highly qualified employees with outstanding ability. In addition, the
compensation program is designed to promote teamwork, initiative and
resourcefulness on the part of key employees whose performance and
responsibilities directly affect Company profits. The compensation program
strives to align compensation methods with stockholder interests to achieve
desired results and, above all, to pay for performance.
Membership
The Compensation Committee will be composed of not less than three (3)
members of the Board. The members will be selected by the Board, taking into
account prior experience in matters to be considered by the committee, probable
availability at times required for consideration of such matters, and their
individual independence and objectivity. Each member shall be an "independent
director" within the meaning of Section 4200(a)(15) of the The Nasdaq Stock
Market, Inc. Rules, be a "non-employee director" within the meaning of Rule
16b-3 of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
(3) be an "outside director" under the regulations promulgated under Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
No officers or employees of the Company or any of its subsidiaries may
serve on the Committee unless if, in the opinion of the Board of Directors, the
former officer will exercise independent judgment and will significantly assist
the committee to function. However, a majority of the Committee will be
directors who were not formally officers of the Company or and of its
subsidiaries.
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Meetings
The Committee shall meet at least two times annually, or more
frequently as circumstances dictate. The Committee may meet in person, by
telephone conference call, or in any other manner in which the Board is
permitted to meet under law or the Company's agreement. As part of its job to
foster open communication, the Committee should meet at least annually with
management to discuss any matters that the committee or each of these groups
believe should be discussed privately.
Minutes
Minutes shall be kept of each meeting of the Compensation Committee and
will be provided to each member of the Board of Directors.
Compensation Components
The Company's executive compensation program consists of a mixture of
base salary, cash bonuses and stock options. In determining the mix and total
amount of compensation for each executive officer, the Compensation Committee
subjectively considers the executive's overall value to the Company including
past and expected contributions by the officer to the Company's goals. In
addition, the Compensation Committee strives to balance short-term and long-term
incentive compensation to achieve desired results.
Base Salary
The Company has historically determined base salary for its executives
based on qualifications, job requirements and competitive market salaries that
such qualifications and job requirements command. As the Company grows, it will
rely more heavily on peer group competitive compensation practices to remain
consistent and competitive in its compensation practices.
Salaries for executives shall be reviewed by the Compensation Committee
on an annual basis and may be adjusted based upon its assessment of the
individual's contribution to and financial growth of the Company as well as
competitive pay levels.
Bonus
Bonuses may be granted for a fiscal year after the financial results
for that fiscal year become available. The Compensation Committee shall meet to
consider annual bonuses for each executive based on individual performance as
well as overall financial results of the Company for the year. There is no plan
requiring that bonuses be paid. However, pursuant to their employment
agreements, certain executive officers may be entitled to receive an annual
bonus, the actual amount of which shall be determined in the sole discretion of
the Compensation Committee.
Stock Options
The Company believes that significant equity interests in the Company
in the form of stock options held by the Company's management serve to align the
interests of the executive management team with shareholder interests. The
Compensation Committee may grant stock options and restricted stock to
executives and other key employees of the Company pursuant to the Stock Option
Plan, as amended.
In determining the grants of stock options and restricted stock, the
Compensation Committee shall take into account, among other things, the
respective scope of responsibility and the anticipated performance requirements
and contributions to the Company of each proposed award recipient as well as the
amount of prior grants.
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